This is my first forum topic, so I'm not sure if I'm doing this right- or if this has already been done. Anyway, moving on.
What is your favorite Anime that is in an Anime? Like an anime that a character watches, or is shown frequently. It doesn't matter if it's real or not, but I'm just curious.

There are many anime shows that have, as part of their plot, an anime show it it. For example: did you ever see Genshiken? [http://en.wikipedia.org/wiki/Genshiken#Anime_adaptation] Genshiken has, as a plot device, it's own anime show in it that the characters of Genshiken watched (they were a "media club" that included reviewing anime, games, manga, etc.).

The "show within a show" was called Kujibiki Unbalance.

The majority of manga and anime references made in Genshiken are on the then-fictitious series known as Kujibiki Unbalance, a stereotypical romantic comedy. Kujibiki Unbalance was likely originally conceived (at least partially) to avoid potential copyright problems from referencing another series too heavily, but has since spun off into its own full fledged manga and anime series.

So it would be like watching a Hollywood movie where the characters sat around talking about another movie. Kind of like holding a mirror up to another mirror ....where you get that endless reflection (mirror within a mirror within a mirror, etc.).

Another example would be Martian Successor Nadesico which threaded the show Gekiganger III through it:

Gekiganger III (ゲキ・ガンガー3 Geki Gangā Surī?) is an anime series within the anime series Martian Successor Nadesico that plays a critical part in the plot thereof. Gekiganger III was designed to mimic 70s Super Robots, especially Getter Robo. Initially, only Gai Daigoji and Akito Tenkawa are depicted as enjoying the series. Later in the series, Hikaru Amano becomes the other resident anime fanatic, and towards the end of the series everyone on the ship learns to love the series. [http://en.wikipedia.org/wiki/Gekigangar]

Sigh... Sometimes when you watch an anime, you'll see a character watching another anime (ei. Oreimo- Kirino watching Magical Girl Meruru, or Haganai- Kobato watching Kurogane no Necromance, etc). Is there an anime in an anime world, real or not, that you have seen?
...Does this help? If not, I kind of don't fully understand the question myself, if it makes you feel better.

I forget the title but it was about a guy who sat in his room for like 2 years when he dropped out of college and a girl comes trying to rescue him from it and his friend lives next door and has magical girl posters or some bullshit

I forget the title but it was about a guy who sat in his room for like 2 years when he dropped out of college and a girl comes trying to rescue him from it and his friend lives next door and has magical girl posters or some bullshit

Also chaos head

That show is Welcome to the NHK.

Only show within show I have seen is Gekigangar on Martian Successor Nadesico.

I forget the title but it was about a guy who sat in his room for like 2 years when he dropped out of college and a girl comes trying to rescue him from it and his friend lives next door and has magical girl posters or some bullshit

Also chaos head

That show is Welcome to the NHK.

Only show within show I have seen is Gekigangar on Martian Successor Nadesico.